Allstate Says 95% of Sandy Claims Settled, but Rate Hikes Likely

Allstate Corp's quarterly profit
fell 45 percent on losses from superstorm Sandy, but the home
and auto insurer said it has paid out about 95 percent of Sandy
claims and is seeing rate increases across businesses.

Feb 6 Allstate Corp's quarterly profit
fell 45 percent on losses from superstorm Sandy, but the home
and auto insurer said it has paid out about 95 percent of Sandy
claims and is seeing rate increases across businesses.

The largest publicly traded home and auto insurer in the
United States raised its quarterly dividend to 25 cents per
share from 22 cents and announced a $1 billion share buyback
program.

"In auto insurance, we expect to see relatively modest price
increases, which are at or below the rate of inflation, across
the industry," Chief Executive Thomas Wilson told Reuters.

Wilson was more optimistic about the home insurance
business, where he expects prices to continue to rise throughout
the industry.

"Catastrophe losses are much higher in the last five years
than they have been at almost any period in history and so those
costs need to be passed on to customers."

The company recorded catastrophe losses of $1.06 billion for
the fourth quarter, up from just $66 million in the year-ago
period. Losses from Sandy were $1.12 billion.

The company had to correct prior-period catastrophes it
overestimated and the benefit of that went into the current
quarter, Wilson said to explain why the total catastrophe losses
were below the Sandy losses.

Wilson said Allstate had 170,00 claims from Sandy and about
98 percent of them have been closed.

Sandy, which struck the northeast United States on Oct. 29,
is expected to be the second-costliest catastrophe in the
country's history, with insured loss estimates as high as $25
billion. The costliest catastrophe was Hurricane Katrina in
2005.

For a factbox on initial Sandy-related loss estimates
reported by insurers so far, click

FOURTH-QUARTER PROFIT

Allstate's net income fell to $394 million, or 81 cents per
share, in the quarter ended Dec. 31 from $712 million, or $1.40
per share, a year earlier.

On an operating basis, it earned 59 cents per share.

Analysts on average had expected Allstate, considered one of
the most exposed companies to insured losses from Sandy, to post
a loss of 5 cents per share, according to Thomson Reuters
I/B/E/S.

Underlying combined ratio, the percentage of premium revenue
an insurer has to pay out in claims, was down 4 percentage
points for the quarter to 86.7 percent.

"Looks like it was core underwriting performance more than
anything else ... core loss ratio came in well below what we
expected," Stifel Nicolaus analyst Meyer Shields said.

The new $1 billion share repurchase program will be
implemented in conjunction with another $1 billion program
announced in December, which is to be funded with hybrid debt.

Allstate, with a market value of about $21.35 billion, is a
Standard & Poor's 500 index component.

The company's shares, which have risen 14 percent in the
past three months, were up 3 percent in trading after the bell.
They closed at $44.31 on the New York Stock Exchange on
Wednesday.